In his first national security meeting as acting defense secretary, Patrick Shanahan said DoD should stay focused on the national defense strategy and the strategic competition with China.

WASHINGTON — Acting Defense Secretary Patrick Shanahan held his first national security meeting at the Pentagon on Wednesday. On his second day on the job, Shanahan informed senior DoD leaders that he intends to stick with the national defense strategy that former Secretary James Mattis rolled out a year ago.

The meeting, attended by the secretaries and undersecretaries of the military services and other top officials, is a routine gathering that the defense secretary conducts twice a week. According to a DoD official, Shanahan told attendees to focus on the national defense strategy and to “keep this effort moving forward.” He also told them to “remember China, China, China.”

On Wednesday Shanahan also attended his first White House cabinet meeting.

Shanahan, who became deputy secretary of defense July 19, 2017, was unexpectedly promoted to acting defense secretary. Former secretary Mattis turned in his resignation letter Dec. 20 and had intended to leave his post Feb. 28 over policy differences with President Trump. But Trump abruptly decided to accelerate Mattis’ departure and Shanahan became acting secretary on Jan. 1. By law, he can remain in that capacity for 210 days before the White House has to nominate a permanent secretary of defense, who would have to be confirmed by the Senate.

Pentagon Comptroller and Chief Financial Officer David Norquist for now will perform the duties of deputy secretary of defense, while also retaining duties as comptroller.

The DoD official told reporters on Wednesday that Shanahan intends to keep the department motivated to prevail in “great power competition” much like Mattis was. He said China is a “major focus” but did not mention Russia.

The 2018 National Defense Strategy says the United States is at risk of losing its military edge as Russia and China develop advanced precision-strike weapons, integrated air defenses, cruise and ballistic missiles cyber warfare and anti-satellite capabilities.

Shanahan spokesman Joe Buccino said in a statement that the acting secretary of defense “continues to focus on implementation of the National Defense Strategy.”

His emphasis on the National Defense Strategy implies that Shanahan will press on with efforts to modernize the military and invest in advanced space technologies and hypersonic weapons to counter China. At a Dec. 13 meeting with executives from the National Defense Industrial Association, Shanahan said investments in hypersonic weapons are part of “what it takes to win” in a great power competition.” He said he wants to see DoD field hypersonic missiles in large numbers. “We’re going to set up an industrial base that drives innovation,” Shanahan said.

Underscoring China as a strategic competitor also could mean greater support for a “space sensor layer” that DoD is in the early stages of designing to counter Chinese and Russian hypersonic glide vehicles. Officials said these advanced weapons cannot be detected with current ground radar or missile warning satellites in geostationary-Earth orbit. The plan is to deploy sensors in low-Earth orbit to detect and track dimmer glide vehicles.

Conflicts of interest

Since the news broke that Shanahan would be taking over as defense secretary, critics have questioned whether his 30-year career at the Boeing Company would compromise his ability to make impartial decisions that could affect the company’s business.

Buccino said that under his ethics agreement, Shanahan has recused himself for the duration of his service in DoD from “participating in matters in which the Boeing Company is a party.”

Industry consultant Loren Thompson, of the Lexington Institute, told SpaceNews that Shanahan is likely to follow in the footsteps of previous defense industry executives who stepped into high level DoD posts and tried “too hard” to prove that they were not favoring their previous employers.

“The danger is that he will try hard to prove he is not favoring Boeing and in the process put the company at a disadvantage,” said Thompson, whose think tank receives funding from Boeing and other top defense contractors.

Shanahan in his last job at Boeing was moved laterally, rather than promoted, to senior vice president of supply chain and operations. “Which is a way to say that he was not moving any higher in the company,” said Thompson. That would give him a reason to not want to help the company even if he could, he added. “There is more of a danger that he will do something that is bad for Boeing because he’s so concerned with not looking like he’s conflicted.”

Shanahan would have to recuse himself from any matters that would affect Boeing’s business, such as aircraft and satellite procurements, and space launch policy. Boeing and Lockheed Martin are co-owners of United Launch Alliance, a key competitor in national security space launch. “Any decision that Shanahan makes on space launch inevitably will have some bearing on Boeing’s future business prospects,” Thompson said. “Whether it’s good or bad for Boeing, he’s conflicted so he should stay out of it.”

Space Force reorganization

Shanahan for the past year has been the Pentagon’s point man in the reorganization of military space forces. Since June, he has been in charge of implementing Trump’s order to stand up a new military branch for space.

Thompson said Shanahan’s role in carrying out the president’s Space Force directive — a reorganization that Mattis had opposed as too disruptive and costly — earned him favor with the White House. “Policy people around the president like the idea of Shanahan being defense secretary, because he’s not a policy guy. He’s an engineer,” Thompson said. This makes Shanahan a strong candidate for the nomination to become secretary of defense.

Budget analyst and space policy expert Todd Harrison, of the Center for Strategic and International Studies, noted that Mattis “never really got engaged in the Space Force debate, so I don’t think his departure will swing things one way or the other.” Shanahan as deputy secretary “had no choice but to be the referee among competing factions. At this point I think it is really up to the White House and National Space Council to work the Space Force issue in terms finalizing the legislative proposal and working to build support on the Hill. Shanahan will certainly lead the rollout from the DoD side, but this has always been an issue that extends higher than just DoD.”

A Pentagon insider who has followed the Space Force debate said Shanahan most likely will delegate space reorganization responsibilities to Undersecretary of Defense for Policy John Rood and Air Force Secretary Heather Wilson.